August 30, 2007

Seal-Fight in San Diego

by emptywheel

There are two, related developments in San Diego (hat tip to ChrisC for her updates) in the Wilkes/Michael/Kontogiannis side of the Wilkes trial. First, the government has responded to John Michael's attempt to throw out his indictment because of a weird connection between Tommy Kontogiannis and one of the prosecutors, Phillip Halpern. As I suggested in my post on this motion, I think Michael is more interested in exposing a bunch of details about Tommy Kontogiannis than he is optimistic about getting the case out thrown out.

I doubt the motion to have the charges dismissed (or even SD's US
Attorney office recused) will succeed. But I'm guessing the actual
purpose of this motion is to make public a great deal of information on
Kontogiannis to--at the least--completely discredit him as a witness.
If not to bring public pressure to indict Kontogiannis for the other
crimes the government admits he has committed.

I'm guessing the government's lawyers at least partially agree with my assessment, which I'll discuss in more detail below.

The whole question is relevant to the other news in the trial--that the Appeals Court has ordered Judge Burns to unseal the redacted transcripts for the hearings on Kontogiannis' plea deal. This actually seems like a victory for the government, because the Appeals Court,

... requires the district court to maintain under seal only the disputed portions of the sealed transcripts. The district court shall unseal the redacted transcripts submitted to the district court by the government on June 22, 2007.

In other words, the portions of the transcripts that the government wanted to retain under seal in June when this whole squabble started will remain under seal. Which means, if we're going to get the really juicy details about Kontogiannis, we're going to get them from Michael.

I'm fairly unsympathetic to the government's main argument in response to Michael> They argue that the laundry list of crimes Michael describes Kontogiannis' as having committed all occurred before the plea deal, and therefore don't count.

First, defendant Michael avers to ongoing criminal conduct by Kontogiannis, but relies on activity from 2005. Kontogiannis pled guilty on February 23, 2007 pursuant to a Plea Agreement with the government. If the government becomes aware of new criminal activity by Kontogiannis – which Michael alleges with great bravado, but does not prove – the government will take appropriate action, which might include withdrawing from Kontogiannis’s Plea Agreement, as it has the right to do in the event of new crimes by Kontogiannis.

The government then goes on to suggest that the benefit Michael alleges the government gave Kontogiannis, in exchange for his plea deal, was that he could continue to make payments on the bulk of the other fraudulent mortgages he had written.

Defendant Michael’s basis for his charge of government misconduct
appears to be his complaint that “rather than requir[ing] Kontogiannis
to pay off [any fraudulently obtained mortgages], the federalgovernment instead is allowing Kontogiannis simply to continue making monthly payments on the fraudulent mortgages.”

They're technically correct. But Michael's larger point is that Kontogiannis is a long-time crook, and the government ignored a huge amount of mortgage fraud that he conducted at the same time as he conducted the fraud related to Cunningham when they charged Kontogiannis with just one count.

The Game over Mentioning the Big Crimes

The government knows--as Michael no doubt does, too--that Michael will shy away from this real allegation, that the government is ignoring a whole bunch of mortgage fraud, because exposing those details would implicate Michael himself. The government states this pretty clearly.

What defendant Michael fails to mention is that several of these mortgages were originally written by Defendant’s company, Coastal Capital. Indeed, it appears that defendant Michael was intimately involved in the fraudulent scheme with Kontogiannis, according to the statements of witnesses (Def.’s Mot., Ex. 16, p. 5 (“And were these loans taken out through Coastal Capital with the direction of John Michael?” A: “Orchestrating it, yes.”)), the documents, and Kontogiannis’s Plea Agreement (Ex. 1, p. 5 (“[Kontogiannis], Michael, and others were also involved in writing and selling fraudulent mortgages on various properties.”).

Which is the real pickle Michael is in: I'm sure he'd like us to have more details about the kind of fraud Kontogiannis regularly engaged (engages) in. But he can't do so without exposing himself to further charges.

Now If Michael Wanted to Cooperate...

Which just leaves the government to dangle one more possibility--that Michael could prove that Kontogiannis' bribes have been ongoing. If Michael could prove that Kontogiannis is involved in ongoing fraud, the government suggest, they might nullify Kontogiannis' plea deal.

Far from countenancing ongoing criminal activity, the government made clear in its Plea Agreement that any further crimes by Kontogiannis prior to sentencing would invalidate the agreement.

[snip]

Even more significant, in that circumstance the government reserves the right to withdraw from Kontogiannis’s Plea Agreement entirely, set aside his guilty plea, indict him, and proceed to trial against him. At the trial, the government could use Kontogiannis’s admissions in his Plea Agreement against him. Id. p. 16 (“The government may use these admissions [in the “factual basis” paragraph] against me in any proceeding.”). As detailed above, these admissions cover his engaging in the business of money laundering and involvement with defendant Michael in a fraudulent mortgage scheme.

Of course, it would involve Michael admitting to more fraud than he currently is. Curiously, it appears that, after getting Kontogiannis' cooperation, the government tried to get Michael to plead guilty to lesser crimes, but Michael refused.

Defendant’s motion is especially ironic given that counsel for the government, along with agents from the FBI and IRS, spent well over an hour with then-newly-retained defense counsel at a meeting on or about April 12, 2007, explaining the obstruction charge, the government’s case, and defendant Michael’s potential exposure, all in an effort to resolve the case against defendant Michael prior to superseding the indictment in May.

Evidently, even after being walked through his exposure to additional charges, Michael refused to deal.

Finally, the government uses Michael's own words to make Kontogiannis' boasts--which were no doubt intended to serve the purpose of making his testimony unusable--themselves unusable.

The only evidence defendant Michael points to that amounts to even a whiff of a hint of a suggestion of something untoward about Kontogiannis’s guilty plea is Kontogiannis’s own boast to Defendant that he had a connection with AUSA Halpern. Def.’s Mot. p. 15. Of course, Kontogiannis is the same individual whom Defendant calls a “remorseless and manipulative sociopath” who is “unworthy of belief.”

I get the feeling this is not the last time we'll be hearing these words in this trial.

The Government's Efforts to Undo the Exposure Michael Has Done

Before they make the bulk of their argument against Michael, though, the government attempts to sweep the details exposed by Michael under the rug in two ways. First, they suggest that the judge might throw out the brief--or most of it--on account of its length:

Defendant’s 47-page brief is nearly double the size allowed by this Court according to its local rule. See CrimLR 47.1 (e). As Defendant cited to the local rules himself as authority (see D’s Mot. p. 30-31), he clearly is familiar with these rules. Defendant did not request leave of this Court to file his oversize brief. In light of the ongoing litigation in this case, and to avoid the precedent of boundless briefing for each set of motions, the government submits that the Court is within its discretion to strike Defendant’s non-compliant brief, or the pages of the brief in excess of 25.

At the same time, the government suggests that, if the judge doesn't throw out the entire brief, they're going to ask him to seal the FBI affidavit including extensive details on Kontogiannis, which Michael's lawyer had already leaked to the press.

Similarly, the Court may consider the need to strike or seal Exhibit 6, a document which remains under seal in the court of filing.

Earlier, the government submitted a fairly anal brief strongly suggesting (though not accusing directly) that the leaked copy had to have come from the materials turned over to Michael on discovery. So now Michael has leaked this affidavit twice, and the government has complained twice. I guess it's time to read through that again...

Add this to the fact that the government refused Michael's request for a Bill of Particulars outlining his precise crime, and it seems like we're going to get some new details when we get to trial, but we're not going to get them before then, not if the government can help it.

In the meantime, though, I imagine Michael is going to fight to expose more details about Kontogiannis--if he can do it without incriminating himself.

Update: Oh, one more detail that may become significant later:

Defendant Michael has moved for production of any audiotape of his August 2, 2005 grand jury appearance. In this district, grand jury proceedings are recorded via court reporter. The government has been informed by the court reporter that no audio tape exists for the proceeding on August 2, 2005.

Comments

Great Job EW - you and TPM have been the go-tos on this. It is pretty funny that Gov is digging so deep as to try to get the brief kicked for failure to request leave to file brief longer than the standard limit.

I should think there are creative ways for Michael to get the info out without directly incriminating himself. I would alos think that the government already knows of Michael's uncharged crimes in this regard, so it is not like he particularly needs to be worried about tipping them off. As to the length of the brief argument, Michael should have submitted a pro forma motion to exceed presumptive length, but this is not a big deal. Defendant are entitled to present their defenses; this argument by the government is spurious. Exhibits are not generally considered pages for purposes of such a limitation on brief length. I don't know EW, I still like Michael's motion a little better than you do. I don't think it stands much chance of resulting in dismissal on it's own, but it is designed to wreak havoc that could lead to dismissal or huge problems for the government down the road; and this is still possible. The government has a problem with Kontagiannis; they are, form appearances, aiding and abetting an ongoing pattern and artifice to defraud. There is, undoubtedly, much more behind the government's relationship with Kontogiannis. They have a problem here. The official record of a Federal Grand Jury has disappeared? WTF? That is very problematic if there are no copies, transcriptions, or the like; and would constitute actual prejudice to his ability to defend himself. I would like to hear more about that....

I was about to make a comment on the odd way that the Cunningham statement ends, but then I noticed this. The government says that the SDUT document is "is a copy of the first 11 pages of the original". The SDUT version ends with this paragraph:

When asked if he was aware of any wrongdoing by other
members of Congress, Cunningham said that Wilkes had hosted fund
raisers for Tom Delay and Jerry Lewis. Cunningham also stated that
he had observed Wade and Katherine Harris having meals together.

Every time Kontogiannis got caught, he continued to bribe and steal. Nevertheless, he always gets a break. When he was on probation for bribing an embassy employee, he bribed the Queens school district supervisor for fraudulent contracts. Before he entered the guilty plea on that, he bribed Duke using fraudulent mortgages to launder the funds. OK, he had to pay back the Queens school district, which he probably did with the fraudulent mortgage money. Now he has to pay back the mortgage money. The "paybacks" are getting larger and larger. He is going to have to pull off one huge massive swindle to get the money to pay them back at no cost to himself. What do you think it will be- a hedge fund going down- or maybe after Cheney bombs Iran to smithereens , they are planning on handing out bags of money again?
The DA that prosecuted Kontogiannis in NY issued a press release indicating that Kontogiannis would be barred from accepting contracts with New York State, New York City or school districts in New York State. Nevertheless, Kontogiannis continues to lease space in a building owned by his wife to the Queens school district and to the federal government. In fact, the building was once an unfinished junior high school owned by the Queens school district.

It is hard to imagine why someone who has shown such little regard for our laws is allowed to continue to commit crimes over and over without any real consequences.

I would also like to point out a connection with someone else in the news this week. The largest receipient of Wilkes and Wilkes associate money in the Senate was Larry Craig.
http://www.researchfortherestofus.org/CorruptionFiles/Craig/CraigMain.htm

ChrisC - I don't think there is any question but that at least one Federal Agency is "running" Kontogiannis, and maybe more than one. Really, the evidence is crystal clear in that regard. The only question is who, why, how long and how deep? The answers, should we be fortunate enough to ever truly know them, will be very ugly for the government. I would not be surprised if Kontogiannis "retired" somewhere from which he is un-attachable.

"Finally, the government uses Michael's own words to make Kontogiannis' boasts--which were no doubt intended to serve the purpose of making his testimony unusable--themselves unusable.

The only evidence defendant Michael points to that amounts to even a whiff of a hint of a suggestion of something untoward about Kontogiannis’s guilty plea is Kontogiannis’s own boast to Defendant that he had a connection with AUSA Halpern. Def.’s Mot. p. 15. Of course, Kontogiannis is the same individual whom Defendant calls a “remorseless and manipulative sociopath” who is “unworthy of belief.”

I get the feeling this is not the last time we'll be hearing these words in this trial."

I think,it is pertinent to note that government does not challenges that Mr Kontogiannis does in fact made that statement.
The following question arises:Is there independent confirmation for this statement?

You're the lawyer, not me. But my feeling that the motion isn't going far is that they're trying to make something of the Uncle-Daughter connection, which I think is barely worthy of mention. Do I think Michael's lawyer will be arguing, repeatedly, that KOntogiannis' plea deal is improper? Yup. But Michael still ahs to dance around that to avoid admitting that he knows the proof of K's crimes directly.

And remember--my note from the last post on this. Michael notes that K told him more than just that he had a connection with Halpern. it's that others stuff that Michael plans to drop during the trial, I'd wager.

I saw a little of it on the late night rerun. I haven't watched the video yet but it's a topic near and dear to our hearts.

I like to compare the discourse on these panels with EW postings and thoughful comments here. Sometimes, I learn something new by listening to the folks on the panels. At the very least, one hears a few more pov's.

One way some of these figures in the news could finance projects would be if they had access to a few bricks, though one shrinkwrapped bundle of US foreign aid currency would finance only a simple endeavor; there was a congressional hearing about trying to account for missing bricks; evidently several thousand bricks were absent from the tabulation, according to congress' information. See this February 2007 18pp document by Rep. Waxman's oversight committee. A brick=$400,000. USD.